Save Question 2 (1 point) On January 1, 2010, Palm, Inc. purchased 80% of the st

Question

Save Question 2 (1 point) On January 1, 2010, Palm, Inc. purchased 80% of the stock of Stone Corp. for $4,000,000 cash. Prior to the acquisition, Stone had 100,000 shares of stock outstanding. On the date of acquisition, Stone's stock had a fair value of $52 per share. During the year Stone $280,000 in net income and paid dividends of $50,000. What is the balance in the noncontrolling interest account on Palm's balance sheet on December 31. 2010? reported $1,000,000 $1,086,000 $1,096,000 Save 31 MacBoo

Explanation / Answer

correct option is "C" 1086000

Non controlling interest =beginning share of fair value +share in net income -share in dividend

         =[52*100000*.20] +[280000*.20]-[50000*.20]

         = 1040000+56000-10000

         = $ 1086000

**share of minority interest =100-80 =20%

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